MARKETING MANAGEMENT

What are Distribution Channels

Distribution Channels are a set of

interdependent firms who facilitate in the
process of Distributing / Selling / Promoting
products to end users.
Why Distribution Channels

Channel Create

Price Utility
Time Utility
Quantity Utility
Assortment Utility
Possession Utility
HOW CHANNEL MEMBERS ADD VALUE
Physical possession Ownership Promotion
Negotiating Financing Risking Ordering Payment

Risk
Risk Taking
Taking Information
Information

Financing
Financing Promotion
Promotion

Physical
Physical Contact
Contact
Distribution
Distribution

Negotiation
Negotiation Matching
Matching
 CHANNEL LEVELS

0-level channel
Manufacturer
Manufacturer Consumer
Consumer
1-level channel
Manufacturer
Manufacturer Retailer
Retailer → Consumer
Consumer

2-level channel
Mfg
Mfg → Wholesaler
Wholesaler Retailer
Retailer → Consumer
Consumer

3-level channel
Mfg
Mfg → Wholesaler
Wholesaler→ Jobber
Jobber → Retailer
Retailer → Consumer
Consumer
 DUAL DISTRIBUTION

Dual Distribution is the use of Two or

More marketing channels to distribute
the same product to the same Target
Market

Eg: HLL using Wholesaler / Retailer

Channel & also Multi Level Marketing
Channel-Design Decisions

Analyzing Consumers’ Desired

Service Output Levels

Establish Objectives

Type / Number of Intermediaries

Evaluating Major
Channel Alternatives
Service Out put Demand

Spatial convenience
Waiting time
Assortment
Bulk Breaking
Service backup
 Channel Objectives
Needs to be in terms of targeted
customer service output levels

Channel Objectives vary with Product

characteristics
Perishables – Direct Marketing
Products with Installation –Direct /
company franchisee
 Channel-Type Decisions
Intermediary type

Merchants
Buy, take title, and resell merchandise

Agents
Find customers, negotiate, do not take
title to merchandise

Facilitators
Aid in distribution, do not negotiate or
take title to merchandise
Number of Intermediaries

Intensive Selective
Channel
Distribution
Strategies

Exclusive
 Number of Intermediaries

Exclusive distribution :
Severely limited distribution

Selective distribution :
Some intermediaries willing to carry good

Intensive distribution :
Product in as many outlets as possible.
Criteria for Channel Alternative
Evaluation

Economic Control
Adaptive
Channel Development Process

FEEDBACK
FEEDBACK
Selection Training

FEEDBACK
FEEDBACK
Motivation Evaluation

Modification
 Channel Dynamics
Channel systems are constantly
evolving and developing

Vertical Marketing Systems

Horizontal Marketing Systems

Multi channel Marketing Systems

 Vertical Marketing System
Comprises the manufacturer ,wholesaler ,retailer
acting as unified system where in one channel
member controls the entire channel

Horizontal Marketing System

Two or more unrelated companies put together
programs to exploit an emerging marketing
opportunity
 Channel Conflict

Types of conflict
Vertical -Between different levels within the channel
Horizontal – Between members at the same level
Multi channel – Manufacturer establishes 2 or more
channels to sell in the same market

Causes of conflict
Goal conflict
Perception conflict
Role Conflict - Unclear roles and rights
Managing Channel Conflict

Mediation
Arbitration
Diplomacy

Exchange People Between Channel Levels

 TRANSPORTATION

Air Rail

Transportation
Transportation
Modes
Modes
Pipeline Truck

Water
Choosing Transportation Modes

1. Speed

2. Dependability

3. Capability

4. Cost

5. Availability
PROMOTION
 Integrated Marketing Communication
(IMC)
What is IMC

Advertising
Sales Promo.
Direct Marketing
Personal Selling
Public Relation

Objective : Clear Consistent Compelling

Message

Need for IMC

Developing Promotion Mix

1. Identify Target Audience

2. Determine Objectives -Awareness, Knowledge, Liking...
3. Design Message - Content , Structure ,Format
4. Select Channel - Personal Vs Non Personal channel

5. Establish budgets - type of product ,plc , competition…

6. Promotion Mix - Advertising , Sales Promo ,Selling

7. Measure Results - Sales , Message effectiveness

8. Manage Total communication
Process
 Advertising

Paid form of Non Personal Communication by an

identifiable sponsor to a target audience through
media

5 M’s
Mission Money Message
Media Measurement
 Objectives / Mission
• AIDA ( Attention Interest Desire Action )

• Hierarchy of effects

DAGMAR

• Compensation principle

Inform Persuade Remind Reinforce

 MONEY / BUDGETS

• Affordable Method
• Percentage of Sales
• Competitor Parity
• Objectives & Tasks
 Developing the
Advertising Campaign
 Message
Message Generation

Message Execution Style & Format

Slice of life
Lifestyle : Bacardi

Fantasy : VIP Frenchie ad

Mood or image : king fisher

Musical: Airtel
Personality symbol: Creates a character that personifies the product.

FIDO DIDO
Scientific evidence: This style is common in the over-the-counter
drug category.
Testimonial evidence: expert source endorsing the product. Example:
Sunsilk, Hair expert Coleen
 MEDIA

Media Decision
Reach Frequency Impact

Media Types
Print : Newspaper Magazine
Broadcasting : Television Radio
Outdoor : Hoardings
Internet : Banners Pop Up
 Print Ad Components

Picture

Headline

Copy
Signature
SALES PROMOTION
What is Sales Promotion
Short term incentive given to a customer to buy the product now.

Effectiveness of Sales Promotion

sales Promotion alone

100

P P P

Advertising then Promotion

sales
150

AP AP AP A
 REASONS FOR RAPID GROWTH OF
SALES PROMOTIONS

• Company – Quick Fix strategy

• Increasing Competition
• Customers – More Price Sensitive
• Immediate Positive Impact On Sales
• Insistence by Channels
• Advertising – More Expensive, Less Effective
• Introducing An Element Of Interest
• Impulse Buying Is Increasing
• Excess Stocks
 Types of Promotions
• Sampling
• Coupons
• Price packs
• Rebates
• Continuity programs
• Contests
• Sweepstakes
• Tie-in promotion
• Financing incentives
• Special events
• Premiums
• Bonus packs
• Exchange offers
Sales Management
 Personal Selling
Face to face role played by the sale
force with the potential buyers to inform
& persuade them to buy the company’s
product
Tasks performed by sales personnel

• Prospecting
• Targeting
• Communicating
• Selling
• Servicing
• Information gathering
Designing Sales Force

Sales force objectives

Sales force strategy

Sales force structure

Sales force size

Compensation
Managing the Sales Force

Recruiting, selecting

Training

Supervising

Motivating

Evaluating
 Principles of Personal Selling
• Preparation
• Approach
• Diagnosis
• Solution generation
• Solution preparation
• Handling Objection
• Closing call
• Follow-up
Public Relations

Involves a variety of programs designed to

promote or protect a company’s image or its
individual products

5 Functions
Press Relations – presenting company news
Product publicity – sponsoring efforts
Corporate communications
Lobbying- dealing with government
Counseling - advising management about public
issues